Developers are pushing the boundaries of what the game could be - by organizing events within the game and creating virtual economies. Metaverse will allow its users to work, meet, play, and socialize, all together in these 3D worlds. How thin is the line between real "dissatisfaction" and the "virtual world in which we would like to live in reality?" There is always a new opportunity for fraud, and fraudsters are always ready to understand how - especially when it comes to money transactions. Cryptocurrency fraud is not new; in fact, blockchain crime through transactions reached $ 7.8 billion in 2021. The launch of a new Metaverse project is no exception to this risk.
This new reality is innovative and attractive, but this new world still comes with risks that are seen in our everyday world. Concerns about security and privacy are following us in this new venture, and business leaders need to be on the pulse of risk faster than ever. As NFTs ( non-fungible tokens) continue to grow in popularity, investors should know what risk of fraud they can pose. Cybercriminals appear to have found a new soft target for phishing scams and fraud – the metaverse. According to victim accounts, they believed that their investments were secure and legit, primarily owing to the fact that the metaverse is integrated with blockchain tech. Unfortunately, after the investors bought what they thought were their metaverse lands, it didn’t take long for cybercriminals to maliciously steal it from them. The hackers basically baited them into clicking on what’s known as “phishing pages” appearing as legitimate websites to the metaverse. Unbeknownst to the victims, they were duped into providing sensitive information and credentials to cybercriminals as soon as they clicked on the links.
Risk at minimal action - The Victims
All those investors wanted was a piece of the metaverse action – a dynamic new virtual world built on blockchain networks and platforms. The metaverse quickly rose to prominence thanks to the involvement of several A-list celebrities, artists, fashion brands, and high-rolling investors. What’s painfully apparent is that the metaverse isn’t safe from cybercriminals. The investors learned the security risks of virtual investing the hard way. There is no doubt that the popularity of investing in virtual real estate (buying land on the metaverse and then selling for a profit on various NFT and blockchain platforms) forced fraudsters and hackers to get out of carpentry. To the best of our knowledge and tracking, cybercriminals initiate phishing scams with an arsenal of high-tech software and malware that is harder to identify.
A skilled long-term care nurse was one of the victims. Ms. Desrosiers bought NFTs worth $ 16,000. It represented metaverse land in popular metaverse platforms such as The Sandbox and SuperWorld. She explained that her dream was to build a game in the virtual universe based on human physiology and anatomy. Sadly, she can no longer do that now. After she bought the NFTs, Desrosiers clicked on a website named Decentraland and unknowingly clicked on a phishing link that redirected her to a phishing site where the bad actors emptied her MetaMask wallet.
Online fitness professional, Tracy Carlinksy, had a similar experience. She clicked on a phishing scam site that was nearly the same as The Sandbox’s homepage. Carlinsky lost $ 20,000. Because the metaverse is an entirely new entity, authorities are yet to keep comprehensive records of how much money small investors are losing because of cybercrime. But there’s no doubt that phishing scams in the metaverse are at an all-time high and will continue to grow. Although investors have potentially lost hundreds of thousands of dollars, corporate investors show no sign of slowing down – continuously injecting staggering amounts of money into the virtual stratosphere. For example, you’d be surprised to know that the company behind The Sandbox, Animoca Brands, recently acquired more than $350 million in capital from various investors such as 10T Holdings and Liberty City Ventures. The Sandbox now stands at a valuation of over $5 billion! One threat is that fraudsters can establish more than one account in the metaverse in order to take advantage of promotions or money fraud. For example, a fraudster may buy crypto from one account they control using stolen money to withdraw once sold to an innocent buyer.
Crypto influencer fraud is also rising, with big names including Bill Gates and Kim Kardashian having their, Twitter accounts hacked with a fake giveaway posted. Other metaverse users should watch out for the same occurrence.
How To Prevent NFT Fraud
As an end-user, always do your due diligence before buying NFTs, research the marketplace and the seller, and look up the art. Scams are booming. On the other hand, if your company is thinking of entering the market, discuss whether or not the investment is worth it with your risk and security team. It might just be passing hype, and we'll see how the metaverse turns out in the long run, but you should do your due diligence for your vendors and plan for risks and scams. Minimizing silos will prevent holes in your fraud prevention plan. It’s also important to layer your defenses with two-factor authentication and machine learning to boot out inauthentic users, bots, and high-risk “online identities.”
Online markets in cryptocurrency represent a sprawling and eclectic alternative financial system, selling cutting-edge techno-investment schemes that are complex and high risk. Crime control is almost entirely absent from this new crypto economy, and it is full of scams. This paper draws on an ethnography of crypto trading to review the main types of scams, suggesting that the grey economy of cryptocurrency trading is part of a wider evolution of society towards the technosocial, and beyond that perhaps towards the metaverse. However, a more reliable solution is to hire a private investigator for cybercrime, then you are on safe ground.
Enabling browser and device fingerprinting will also weed out problematic users when it comes to the metaverse. As more hardware devices come into play like VR headsets, computers, and mobile phones, knowing a customer's device, location and setup can help you spot misalignments and potential risks. Unseen devices often indicate risk. However, some metaverses will be available on multiple devices, which may cause problems if you rely on this alone.
Additionally, data breaches are also currently a global problem. As technology becomes more accessible, leaders and metaverse platforms need to protect their users’ data or risk losing consumer trust and tarnishing their reputation. NFTs have created a new life for cryptocurrency. Business leaders are trying to navigate the role of NFTs in their new digital world, whether it’s selling art, licensing music, or everyday logistics. By staying educated, fast-paced and agile, leaders will be able to take advantage of this new technology while protecting themselves and their customers.
Phishing pages for sale
But there’s a huge illegitimate business as well. The phishing pages responsible for emptying investors’ wallets are for sale on the dark web and popular chat platforms such as Telegram. Some cybercriminals advertise these impostor sites for just $400, while others sell for as much as $5,000 on an underground forum. When landowners type their MetaMask credentials into one of these phishing pages, their username and password are sent to the cybercriminal, allowing the scammer to extract all the digital assets contained in the wallet. The cybercriminal may then resell the stolen land on an online marketplace like OpenSea. The prevalence of these hacks doesn’t surprise Mason Wilder, research manager at the Association of Certified Fraud Examiners.
What kind of risk still exists?
To prepare for secure participation in the metaverse, Internet users must begin to assimilate into this new digital space, and obtaining a digital identity (ID) is one of the first steps. In fact, the disclosure of a user-controlled digital ID may become a prerequisite for access to metaverse goods and services in order to protect businesses and consumers from fraud or unscrupulous behavior. What is a digital ID?
A digital ID is an electronic certificate that proves identity and eligibility. Sometimes issued by a certification authority (CA), digital IDs associate the identity of an organization or individual with their public key (a numeric value used to encrypt sensitive information). Digital IDs can include the following types of personal information:
• Issuance of CA
• Digital signature
• Digital ID serial number
• Public key value and expiration date
What if you already have an ID card issued by a government agency? Is a blockchain version of the driver's license really necessary? People need an ID to enter clubs or travel, and the metaverse will likely eventually require an ID for digital versions of these activities. As in the physical world, certified identification is essential to protect consumers and businesses in the metaverse. Web3 and metaverse leaders need to focus on building secure infrastructure, and digital IDs are an important component of this new connected world.
While Web3 promises to make our online interactions safer, we cannot forget what we have already learned about the Internet and fraud: identity theft increased by 42% between 2019 and 2020, costing Americans $ 712.4 billion, according to Aite Group research. Furthermore, Web3 will not be created overnight. While we wait for a better system to be built, the possibilities of fraud in the metaverse are almost endless. However, the risk is reduced when we give business owners the tools to securely authenticate their customers. Likewise, when metaverse users know that digital IDs are certified and secure, interacting with other users (whether recreational or commercial) becomes a safer experience.
Why Digital ID Is Necessary, Especially in the Metaverse
The metaverse presents a fascinating array of possibilities. However, its digitally native existence creates a unique set of identity verification challenges. How can an online business verify that it isn’t engaging with scammers? How will event owners confirm that their attendees are age-compliant?
The safest markets will meet legal requirements and ask users to share their digital IDs to gain permission for entry. Presenting digital IDs as a prerequisite for participation will make risk management tenable for liquidity providers, decentralized application (dApp) developers, and institutional participants. Legitimate users will likely agree to meet meticulous verification requirements in order to protect their assets. The outcome is a more healthy digital enterprise user's trust.
Helping Humans Beat the Bots
Proving one’s humanity is pretty straightforward in the offline world. However, bots often plague online experiences by relentlessly performing automatic, predefined tasks. Cybercriminals can deploy bots to manipulate clicks, crash platforms, take over accounts, and spam users.
Bots can be especially damaging to NFT owners, like buyers who lost a collective $150K in NFTs to scammers using attack bots. Scammers can use bots to artificially drive NFT prices up or down by placing overly low bids, buying large numbers of NFTs at the lowest price, or bidding above market price on their own NFTs.
Digital IDs require users to prove that they are adult human beings who aren’t violating sanctions or anti-money laundering or combating the financing of terrorism laws. Requiring metaverse users to show digital IDs may eliminate (or significantly reduce) the presence of bad bots, making the metaverse a more hospitable place for commerce and community.
Digital IDs Are Essential in the Metaverse but Practical for Everyone
Ensuring a financially and socially secure environment in the metaverse is impossible without digital IDs. The nature of metaverse experiences necessitates a digital equivalent to identifiers like driver’s licenses and passports. However, it would be a mistake to assume digital IDs only have utility for Web3 activities.
Businesses can benefit from digital IDs right now. For example, bars and clubs that require age verification can accept digital IDs instead of physical cards. Relying on digital IDs is a quick, automatic alternative that avoids the need for human intermediaries (and subsequent human error). Digital IDs also bridge institutions to Defi services, creating more equitable financial possibilities for everyone.
Some analysts project the metaverse market to reach trillions of dollars in the next decade. While that number may ultimately remain in the billions, all evidence suggests that the metaverse is here to stay.
In conclusion, identity is a critical safety layer of the new Web3 infrastructure. With thoughtful development, digital identity can help protect individuals and companies from a broad range of fraudulent activities.
We believe this is too much information in a very short time, but we need to act as soon as possible. Contact us for help if you are a victim of scams in the digital world!
Many experts are concerned about the possibility that identity theft may become even easier in the metaverse if strict security measures are not implemented. Identity theft is already a multibillion-dollar industry in the real world; a study released just last month placed losses to identity theft at approximately $24 billion. Worse, the number of cases has grown over 50 percent from 2020’s figures, according to cybersecurity research.
Unauthorized Data Collection by Companies
Legitimate companies also collect your personal information. However, virtual reality has the potential to take information collection to a point that may be a few steps out of bounds for some people. For example, virtual reality headsets theoretically allow third parties to gather increasingly sensitive personal information such as voiceprint data, biometric information, and even facial geometry.
Ransomware is a type of malicious software that has the ability to encrypt your personal files and block you or anyone from accessing them. It will then display a message urging you to pay a certain amount of money to get your data back, hence the name ‘ransomware’. You can probably imagine how this would be problematic in a metaverse setting. Your metaverse profile is set to contain a lot more information than just a standard social media profile; it will contain all manner of sensitive information as well. Imagine not being able to access your bank accounts or even your personal data. That can become quite problematic in a metaverse setting.
In a world advancing in the consumption of information, concerns are growing over false information campaigns provided through deeply false audio and video recordings that threaten the security of our nation. Deepfakes are videos or audio recordings that have been manipulated to look and/or sound like someone else. Deepfaking works similarly to face replacement, but uses sophisticated artificial intelligence algorithms to gather data about individuals from several different angles so that they can switch to existing video.
Social Engineering Attacks
Social engineering is the practice of psychologically manipulating people into divulging sensitive information. With the amount of personal data that will be stored in the metaverse, it could potentially become a gold mine for hackers looking to sell personal information on the Dark Web. Ultimately, the basis for metaverse security management will be education. You can have the greatest security system in the world, but if the operator doesn’t know how to use the system or is irresponsible, it will do them no good.
New Applications Will Need to Be Vetted
Just like on today’s Internet, new applications have the potential to cause havoc on our digital lives. In a metaverse setting, however, the damage can become even more disastrous with the sheer amount of sensitive data that will be kept. We will need to develop measures to have all new applications checked for malicious code.
Every day, thousands of people become victims of fraud schemes and do not know what to do and where to seek help. Our main goal is to bring justice to scammers and refund the lost funds to their rightful owners. We have already helped thousands of people from all over the world to get their money back. No matter how complex the case is, we will help you too.
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